Asia Pacific seen to lead global economic growth

MANILA, Philippines — S&P Global Market Intelligence expects Asia Pacific to lead global economic growth this year, driven by developments in China and India and healthy expansion in countries including the Philippines.

“Asia Pacific will lead all regions in economic growth,” S&P Global Market Intelligence said in a report.

Sparked by mainland China and India, it said the gross domestic product (GDP) growth of Asia Pacific is expected to strengthen to 4.3 percent this year from 3.2 percent last year.

For 2024, it expects the region to post a faster growth of 4.5 percent.

“While growth in Taiwan, South Korea, and Australia has slowed markedly, expansions in Vietnam, the Philippines, and Indonesia remain robust,” S&P Global Market Intelligence added.

In the first quarter, the Philippine economy grew by 6.4 percent, slower than the eight percent expansion in the same quarter last year and the 7.1 percent growth in the previous quarter.

The first quarter performance was also the slowest pace of growth seen since the 3.8 percent contraction in the first quarter of 2021.

Due to external headwinds, the Cabinet-level Development Budget Coordination Committee (DBCC) sees a slower GDP growth target of six to seven percent this year after accelerating to 7.6 percent last year from 5.7 percent in 2021.

The Philippines slipped into recession with a GDP contraction of 9.6 percent in 2020 as the economy stalled due to strict COVID-19 quarantine and lockdown protocols.

National Economic and Development Authority Secretary Arsenio Balisacan earlier said the first quarter outturn was better than analysts’ median estimates, and shows the economy is going back to its high growth trajectory.

While there are challenges such as high inflation, tightening financial conditions and geopolitical conflicts, S&P Global Market Intelligence executive director for economic research Sara Johnson said a recession is likely to be averted and the global economic growth would proceed at a moderate pace.

The unit of S&P Global said China’s services output and retail sales have rebounded strongly, outpacing the subdued growth in fixed investments and exports.

It expects China to post 5.5 percent GDP growth this year from last year’s 3.3 percent growth, before resuming a long-term deceleration.

It also said India is leading all major economies with both its services and manufacturing posting robust growth, based on the Purchasing Managers’ Index of S&P Global.

Johnson said global GDP growth is expected to slow down to 2.3 percent this year from 3.1 percent last year.

For next year, S&P Global Market Intelligence is forecasting a 2.6 percent global GDP growth before picking up to 2.9 percent in 2025.

“Economic performance will vary widely across sectors and regions, with Europe and the Americas experiencing sluggish growth and parts of Asia-Pacific and Africa enjoying healthy expansions,” she said.

“With commodity prices on a downward path and supply constraints easing, inflation will diminish, allowing monetary policies to ease in 2024–25,” she added.